NY’s COVID-19 lockdown ban set to expire, but homeowners can still get help

New York’s COVID-19 ban on foreclosures is set to end on August 31, and lawmakers and housing advocates are urging homeowners who have fallen behind on their mortgages to seek other protections.

State lawmakers discuss a potential extension of the lockdown moratorium for people facing COVID-19 hardship, although it most likely should be changed in light of a recent Supreme Court ruling overturning a key element of the state’s ban on eviction, State Sen. Brian Kavanagh (D-Manhattan) said Friday. Lawmakers expect to discuss the issue with Lt. Gov. Kathy Hochul after taking office as governor on Tuesday, he said.

In the meantime, the state is preparing to launch its federally funded Homeowner Assistance Fund next month, once it gets federal approval for its plan, Kavanagh said. The program, which is expected to include financial assistance, counseling and other assistance to homeowners, is funded by a $ 540 million injection from the federal American Rescue Act of 2021, passed in March.

“We are really trying to make sure that no one loses their home or suffers long-term economic hardship due to COVID-19,” Kavanagh said. “The goal is not just to delay a possible foreclosure, but to really ensure that homeowners have the resources they need.”

Housing advocates have said homeowners can also benefit from a new rule promulgated by the Federal Bureau of Consumer Financial Protection, which goes into effect on August 31. This measure, which will remain in effect until January 1, requires most lenders to offer loan modifications and other protections. to people facing COVID19-related hardship whose primary residences are threatened with foreclosure, said Leslie Mendoza, an attorney at Lieb at Law PC in Smithtown.

The state’s temporary foreclosure ban “only delays any kind of discussion between the borrower and the lender in terms of resolving defaults,” Mendoza said. In contrast, she said, the CFPB rule should help many homeowners get a modified loan, provided they are eligible.

Homeowners can also benefit from mortgage forbearance programs, Mendoza said. Such programs can reduce interest rates, extend loan terms, and shift outstanding debt until the end of the loan term, in some cases. Homeowners whose mortgages are insured by the Federal Housing Administration have until Sept. 30 to apply for forbearance, the agency said. Those with fannie Mae and Freddie Mac backed federally backed loans have not been given an application deadline.

Those struggling to pay off their mortgages should contact their loan officer to find out who owns their loan and what rules apply, said Kathleen Maher, a Hempstead-based lawyer with the non-profit legal advocacy group Nassau. Suffolk Law Services.

One of Maher’s clients, Nagelande Lerebours, a special education teacher who lives in Baldwin with her three children, aged 12 to 16, and her fiance, Dwayne Evans, has been working to save her home from foreclosure since 2018, after having went through a difficult divorce.

Lerebors’ loan was amended in July and the lender withdrew its foreclosure lawsuit earlier this month, Maher said.

“I had to fight, and the bank didn’t make it easy for me,” Lerebours said. “All of my investment has gone into this house, everything… It’s a blessing and a relief that I can turn the key and come into my house and call it my home.”

Maher urged struggling homeowners to stay in touch with their lenders and seek help from nonprofit housing and legal advocacy agencies, including those affiliated with the state’s Homeowner Protection program: “ It would be next to impossible to navigate alone. “